JBS SA, the Brazil-headquartered global meatpacking leader, announced on Tuesday a proposal to buy the Pilgrim’s Pride Corp shares it does not yet control. Under the terms disclosed, JBS is offering 2.086 of its Class A shares for every Pilgrim’s Pride share, a ratio calculated using Tuesday's closing market prices.
That exchange ratio equates to a valuation of $28.49 per Pilgrim’s Pride share. On Tuesday, JBS shares finished the regular session at $13.66, while Pilgrim’s Pride shares closed at $28.49. In extended trading following the announcement, both stocks rose by roughly 1%.
JBS already holds approximately 82% of Pilgrim’s Pride. Pilgrim’s Pride has a market capitalization of about $6.78 billion. The proposed transaction is subject to a review process and will require approval from a committee of Pilgrim’s Pride independent directors as well as consent from minority shareholders.
The announcement arrives after JBS agreed to form a joint venture with Indonesia’s sovereign wealth fund, Danantara, to pursue protein production investments across multiple countries. Separately, Pilgrim’s Pride recently consented to acquire Walker’s Deli & Sausage Company for about $142 million.
The proposal from JBS would consolidate its ownership of Pilgrim’s Pride by converting outstanding public Pilgrim’s Pride shares into JBS Class A stock based on the stated exchange ratio. The use of Tuesday’s closing prices to set the ratio and per-share valuation is a clear feature of the offer as disclosed.
Next steps for the deal include review by an independent directors committee at Pilgrim’s Pride and a vote or consent process involving minority shareholders, as required by the company’s governance and the terms of the proposed transaction. The market reaction in extended trading—approximately 1% gains for both securities—followed the public disclosure of the proposal.
Summary
JBS proposed a stock-based offer to acquire the remainder of Pilgrim’s Pride it does not own, offering 2.086 JBS Class A shares per Pilgrim’s Pride share and valuing each Pilgrim’s Pride share at $28.49 based on Tuesday’s closes. JBS already owns around 82% of Pilgrim’s Pride, which has a market cap near $6.78 billion. The deal requires review by Pilgrim’s Pride independent directors and approval from minority shareholders. The announcement follows JBS’s joint venture agreement with Danantara and Pilgrim’s Pride’s recent purchase of Walker’s Deli & Sausage Company for about $142 million.
Key points
- Offer terms: 2.086 JBS Class A shares for each Pilgrim’s Pride share; implied price of $28.49 per Pilgrim’s Pride share based on Tuesday’s closing prices.
- Ownership and valuation: JBS holds roughly 82% of Pilgrim’s Pride, which carries an estimated market capitalization of $6.78 billion.
- Concurrent corporate moves: JBS has agreed to a joint venture with Danantara focused on protein production investments, and Pilgrim’s Pride has agreed to buy Walker’s Deli & Sausage Company for about $142 million - developments that are unfolding alongside the proposal.
Risks and uncertainties
- Regulatory and corporate approval process - the transaction must be reviewed and approved by a committee of Pilgrim’s Pride independent directors.
- Minority shareholder consent - minority shareholders must approve the proposal for it to proceed.
- Valuation exposure to market prices - the offer and implied per-share value are based on Tuesday’s closing prices, tying the proposed terms to the market snapshot used to calculate the exchange ratio.